China Introduces Offshore Wind Feed-In Tariffs

China’s National Energy Administration (NEA) has been working with the National Development and Reform Commission (NDRC) tariff department for months to determine the FIT for offshore wind, and the discussions between the two agencies have now been finalised: the inter-tidal projects will enjoy a tariff of RMB 0.75 (USD 0.12) per kilowatt hour while the nearshore tariff will set at RMB 0.85 (USD 0.14)/kWh.

The offshore sector in China has been slow for the past three years, but it is finally entering a ‘mini-boom’, with gigawatts to be installed in the next couple of years. Three years ago, the first round of concession tenders awarded tariffs to four projects totalling 1 GW capacity, and marked a new era for China’s wind industry. However, due to the low tariffs and the complexity of permission by various government departments, the offshore sector never really took off and the first four concession projects were also postponed.

Things are moving now. By the end of 2013, 3 of the four concession projects had all necessary permits and were set to start construction. In the beginning of May, the Shanghai Municipal Government announced additional RE subsidies on top of the FIT given by the central government: onshore wind is given an additional subsidy of RMB 0.1/kWh, while offshore wind a boost of RMB 0.2/kWh. Following this new measure, the Shanghai Oceanic Administration also permitted a new offshore project, the “Shanghai Lingam Offshore Project, Phase I-100 MW”. The total project will be 200 MW. This is a near shore project and will be another big project for Shanghai after the first two Phases of the Shanghai Donghai Bridge project, totalling 200 MW.

Currently China has seven offshore projects under construction totalling 1,560 MW and another 3.5 GW projects in pipeline that will start construction in 2015. China’s official target for offshore wind is set at 5 GW by the end of 2015.